Market Order vs Limit Order: What Are They and What Are Their Differences?
BY TIOmarkets
|February 17, 2026When placing a trade in the forex market, choosing the right order type is just as important as choosing the currency pair. Two of the most common order types are the market order and the limit order. While both are used to enter trades, they work in very different ways and suit different trading styles.
Understanding the difference between a market vs limit order can help you control your trade entries, manage risk, and avoid unexpected prices.
What’s Included in this Article
- What an order means in trading
- How a market order works
- How a limit order works
- Market order vs limit order differences
- Advantages and disadvantages of each order type
- When and how to place market and limit orders
- Which order type may be safer for retail traders
What Is an Order?
An order is an instruction you give to your broker to buy or sell a financial instrument, such as a forex currency pair. Orders tell the trading platform how, when, and at what price you want to enter or exit a trade. Market orders and limit orders are the most basic order types used by beginners and experienced traders alike.
What Is a Market Order?
A market order is an instruction to buy or sell a currency immediately at the best available price in the market. When you place a market order, the trade is executed instantly, but the exact price may vary slightly due to market movement.
Market orders are commonly used when speed matters more than price accuracy, especially in fast-moving markets.
What Is a Limit Order?
A limit order allows you to buy or sell a currency pair at a specific price or better. The trade will only be executed if the market reaches your chosen price. If the price is not reached, the order remains pending.
Limit orders give traders more control over entry price and are often used in planned or strategic trading setups.
| Feature | Market Order | Limit Order |
| Execution | Instant | Only at chosen price |
| Price Control | No | Yes |
| Speed | Very fast | Depends on market |
| Risk of Slippage | Higher | Lower |
| Best For | Fast entry | Planned trades |
| Execution Guarantee | Yes | No |
Market Order: Advantages and Disadvantages
Market orders are useful when you want immediate execution, especially during high-liquidity periods. However, they can be affected by slippage, meaning the final price may differ slightly from what you expected.
Limit Order: Advantages and Disadvantages
Limit orders offer price control and can reduce emotional trading. The downside is that the order may never be filled if the market does not reach your selected price.
Limit Order vs Market Order: Which Should You Use?
There is no one-size-fits-all answer. Market orders suit traders who prioritise speed, while limit orders suit traders who value precision. Many successful traders use both, depending on market conditions.
FAQs
When to Place a Market Order and Limit Order?
Market orders are commonly used when entering trades during strong market momentum or when exiting positions quickly. Limit orders are better suited for traders who plan entries around support, resistance, or specific price levels.
How to Place a Market Order and Limit Order?
On most trading platforms, including MT4 and MT5, placing a market order only requires selecting the trade size and clicking buy or sell. To place a limit order, you must choose the order type, set your desired price, and confirm the trade.
When Limit Orders Are Safer for Retail Investors?
Limit orders are often considered safer for retail traders because they help avoid poor entries caused by emotional decisions or sudden price spikes. They allow traders to plan ahead and stick to a strategy.
Conclusion
Understanding the difference between market order vs limit order is a key step in becoming a confident trader. Market orders offer speed, while limit orders offer control. Knowing when and how to use each can improve trade execution and overall trading performance.
Key Takeaway
Market orders execute immediately, while limit orders execute only at a chosen price. Both have advantages, and smart traders know when to use each.
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